Banks Find Way To Sell Consumers' Shopping Data 195
nonprofiteer writes "Banks plan to compete with Groupon and LivingSocial by targeting coupons and deals at credit card holders based on their shopping habits. They found a way to do it without violating financial privacy laws: 'They're "selling" shopping habits the same way Facebook "sells" personal data about its users: in-network. It's a clever privacy work-around. Just as Facebook allows advertisers to specifically target certain kinds of users based on their profile information (without actually providing that profile information to the advertisers), banks plan to allow advertisers to send deals and coupons to their customers based on what they've bought before. That way, no user data actually leaves the network — instead, deals just enter the network. Each time a customer cashes in on one of those deals, the bank gets a commission.'"
Re:A Technicality: (Score:5, Insightful)
You missed the point, but still have the right argument.
When you pay the bank, you don't get back a list of names at all. The bank would be sending out junk mail, SMS, or email based on your chosen demographics. It would be a 3rd party offer.
Most websites, companies, etc. allow you to specify that you don't want to receive it, but they also specify that affiliates and subsidiaries get access to to the data. The banks don't get that loophole in this case.
In your example, what you are really pointing out is that whatever percentage of customers click on the links, or even view the email with downloaded pictures, are revealing themselves and losing their privacy. In order for the bank to receive a commission it needs to admit that particular customer was indeed part of the chosen demographics.
It violates customer's privacy in spirit, in actuality the customer is mislead at best, and worst responsible for losing their own privacy through their own actions.
In other words, the customers are being tricked into confirming purchasing habits outside of the bank.
Very dirty and hopefully there will be an opt-out option for this voluntarily, or by law.
Re:A Technicality: (Score:2, Insightful)
You just need to know who to talk to.
I'm sure that for their biggest and best customers, the bank will be happy to provide names.
Plus, if you get the right information, the name gives itself up.
I think you have a much too high opinion of banks' intention to act ethically, which is surprising given the news of the past ten years or so.
Anyway, banks aren't even banks any more. A bank is a place that takes deposits and then lends those deposits out to collect interest, a portion of which is paid on the original deposits. I don't think any of the banks we're talking about still makes a significant portion of their income that way. So, by my lights, they are not banks, they are just crooked hustlers that can act with impunity because they have exploited a weakness in our system by which their profits are kept private, while their risk and losses are socialized to the citizenry.
Re:A Technicality: (Score:4, Insightful)
Trivial. The Mormon Police just have the bank send all of those people a bogus prize certificate for a free motor boat and then when they show up to get their boat, the Mormon Police arrest them and beat them to the full extent of the law.
I chose to opt out (Score:4, Insightful)
I place a certain value on my privacy. I had one of those "loyalty cards" years ago at the nearby grocery. I'd use it to get the cheaper price on the stuff they sold me. In return I got a bunch of junk in the mail trying to sell me more stuff. When I stopped using the card I got less junk in the mail.
I had a credit card. In exchange for using the credit card the credit card company sent me stuff in the mail trying to sell me more stuff. They would also call me at home. How far and wide this information on my buying habits went hit me when I used my credit card at a gas station I don't normally visit and a couple weeks later I got a credit card advertisement in the mail from the gas station. I pay for my fuel and groceries with cash now excepting rare occasions when I forget to stop by the bank before my wallet gets too thin, then I pull out my debit card.
Not only does using cash prevent banks from selling my buying habits it also avoids the threat of my bank account information from being stolen with those hidden card readers that are popping up on gas pumps and the like. I don't even like to use ATMs any more. Not only is there a threat of my card getting copied by a hidden card reader the ATMs spit out only $20 bills. With a tank of gas costing over $60 and a grocery cart filled with food typically costing around $100 I prefer to see a real live teller so I can get $50 and $100 bills, that way my wallet doesn't get so fat and I can still buy what I need.
Now, I just wish those vending machines would take $2 and $5 bills. With a bottle of soda costing around $1.50 it makes sense to me to take the larger bills. This is also because I've had to not buy a drink because my wallet is full of $5, $20, and $100 bills.
All the crap in the mail, and the phone calls interrupting my supper, stopped for the most part once I got rid of my credit cards. Not using a debit or credit card for most purchases does mean a few more trips to the bank and having to pay for gas inside the station but that is a minor inconvenience. The bank is within walking distance of my house, and I'll often go into the gas station anyway when I travel to get a snack or use the restroom. It keeps the junk mail and cold calls down.
Simple problem, simple solution... (Score:2, Insightful)
1) Customer does stuff
2) Bank notes this
3) Advertiser asks bank to send coupon to people who did that sort of stuff
4) Bank sends customer coupon
Up to this point, the banks' lawyers are right - there's no information going anywhere bad.
5) Customer uses coupon
Now, we are giving information to the advertiser about the customer. This is BAD, and possibly illegal.
Note on the one hand that it was the customer's action that led to the information leak.
Note on the other hand, however, that the customer does not know what information was to be leaked, and so cannot be said to have given consent. Consider if Macy's asks that a normal-seeming coupon be sent to people who shopped at kinkysextoys.com, using that coupon is in no way tied in the mind of the recipient to the information at stake.
So that's the problem. The solution? Include the relevant information with the coupon. That way, the customer knows what information they are giving to the advertiser, and can absolutely be said to be opting in at that point. This does run some risk of others reading the coupon, and so these coupons must therefore be treated with the same respect given to any other form of transaction history until the customer decides to disclose them publicly by using the coupon.
Two Words (Score:3, Insightful)